By Emily Yates and David Swider
On January 29, 2009, President Obama signed into law the Lilly Ledbetter Act. The Ledbetter Act reverses the decision of the U.S. Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber, Co., in which the Supreme Court, in a 5-4 decision, ruled that an employee had to bring any compensation discrimination claim within 180 days of the first discriminatory paycheck. In Ledbetter, the plaintiff was precluded from filing suit against her employer for discriminatory wages based on gender because she discovered evidence supporting her claim many years after she had begun receiving allegedly disparate pay.
The new Ledbetter Act amends Title VII, the Americans with Disabilities Act, and the Age Discrimination in Employment Act by lengthening the statute of limitations for employees to bring their compensation discrimination claims. According to the Act, unlawful conduct occurs when: "(1) a discriminatory compensation decision or other practice is adopted; (2) an individual becomes subject to the decision or practice; or (3) an individual is affected by application of the decision or practice, including each time compensation is paid." Individuals may receive back pay as damages for discrimination that occurred up to two years preceding the filing of a charge.
It is the last clause of the new law that changes the landscape of pay discrimination claims. Once Ledbetter had received her first discriminatory paycheck, she had 180 days (300 days in a deferral state like Indiana) to file a charge against her employer or her claim of disparate pay would be forever barred. Now, each time someone in Ledbetter's shoes receives a paycheck containing a discriminatory wage, a new 180/300 day statute of limitations begins to run. Stated more broadly, employees or former employees who believe that they have been earning less than their coworkers because of their race, color, religion, sex, national origin, disability or age may now bring their claims within 180 (or 300 days in most states) of the last allegedly discriminatory paycheck they received.
This legislation currently affects only discrimination in compensation; it does not alter the time to bring any other form of discrimination claim (i.e., wrongful discharge, retaliatory discharge, sexual harassment, failure to reasonably accommodate, etc.).